Receivable Acquisition & Management Corp. :CSEI-US: Earnings Analysis: Q3, 2016 By the Numbers : November 15, 2016

Receivable Acquisition & Management Corp. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of Receivable Acquisition & Management Corp. – Green Dot Corporation Class A and Enova International Inc (GDOT-US and ENVA-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 0.24 million, Net Earnings of USD -0.01 million.
  • Gross margins widened from 17.39% to 19.42% compared to the same period last year, operating (EBITDA) margins now -1.76% from -6.35%.
  • Year-on-year change in operating cash flow of 0.35% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-09-30 2016-06-30 2016-03-31 2015-12-31 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 0.24 0.25 0.23 0.29 0.32
Revenue Growth (%YOY) -23.9 -16.1 -13.93 12.63 24.12
Earnings (mil) -0.01 0 -0.02 -0.03 -0.02
Earnings Growth (%YOY) 64.02 104.7 -365.54 26.75 -230.94
Net Margin (%) -3.62 0.17 -9.03 -10.79 -7.66
EPS 0 0 -0 -0 -0
Return on Equity (%) -35.76 1.73 -78.18 -94.67 -66.06
Return on Assets (%) -6.41 0.29 -12.97 -16.46 -12.88

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Market Share Versus Profits

Revenues History
Earnings History

CSEI-US‘s change in revenue this period compared to the same period last year of -23.90% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that CSEI-US is holding onto its market share. Also, for comparison purposes, revenues changed by -1.84% and earnings by -2,206.76% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 17.39% to 19.42% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from -6.35% to -1.76% compared to the same period last year. For comparison, gross margins were 22.57% and EBITDA margins were 3.83% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

CSEI-US‘s change in operating cash flow of 0.35% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -7.66% to -3.62% and (2) one-time items. The company’s pretax margins are now -3.62% compared to -7.66% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Receivable Acquisition & Management Corp. specializes in delivering energy infrastructure and alternative energy solutions to a wide range of commercial customers and institutions such as hospitals and universities. The company has three business components. The first business component is the management of infrastructure projects for commercial and institutional customers. These projects typically involve some combination of energy infrastructure components, including electrical power generation, steam production, or chilled water production, as well as the infrastructure to distribute these services. The second business component is the anticipated deployment of engine technology which converts low-grade heat to mechanical energy. The company is actively marketing the technology particularly for power generation. The third business component is focused on generating fees and financial participations from assisting in the funding of infrastructure projects, arranging leasing and other financing arrangements for engines, and participations in power purchase agreements from developed projects. Receivable Acquisition & Management is headquartered in New York, NY.

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